Franklin Financial Services Corporation · NASDAQ:FRAF
Franklin Financial Services — Boenning & Scattergood Community Bank Forum 2014
32 slides from Franklin Financial Services's conference presentation, Aug 14, 2014
Slide 1: Franklin Financial Services Corporation
Franklin Financial Services Corporation Boenning & Scattergood Community Bank Forum 2014 August 2014 - Hershey, PA
Slide 2: Forward-looking Statements
Forward-looking Statements Certain statements in this presentation which are not historical in nature are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements refer to a future period or periods, reflecting managemen
Slide 3: Company Profile
Company Profile F&M Trust founded in 1906 Franklin Financial formed in 1984 Headquartered in Chambersburg, PA 25 offices throughout Cumberland, Franklin, Fulton, and Huntingdon Counties $1 billion in assets at June 30, 2014 $710 million in brokerage and trust assets under management 68:4 Franklin Fi
Slide 4: Market Area
Market Area
Slide 5: Market Share at a Glance
Market Share at a Glance #1 deposit market share in Chambersburg (44.4%) #1 deposit market share in Franklin County (29.4%) #1 deposit market share in Fulton County (36.1%) #6 deposit market share in Carlisle #8 deposit market share in Cumberland County BEST OF reuse SOA ed by The Sentinel BANG Serv
Slide 6: TRUST
TRUST
Slide 7: Experienced Management Team
Experienced Management Team William E. Snell, Jr President & CEO Mark R. Hollar CFO and Treasurer Jane B. Tompkins Risk Management Steven D. Butz Commercial Services Lise M. Shehan Investment & Trust Services Patricia A. Hanks Retail Services Ronald L. Cekovich Technology Services Karen K. Carmack H
Slide 8: Loan Portfolio
Loan Portfolio % Portfolio Composition m2011 m2012 2013 6/30/2014 Resi&HE Constrand Inc Prod Dev
Slide 9: Improving Loan Quality
Improving Loan Quality Delinquency Total i Nonaccrual $ i £ = 30-89 Days 6/30/2014 Fé$@:4 Franklin Financial Services Corporation
Slide 10: Improving Loan Quality
Improving Loan Quality Non-Performing Assets (000's) 2012 2013 6/30/2014 Non-Accrual MOREO Other 90+ PD
Slide 11: Loan Quality
Loan Quality Net Chargeoffs/Provision Net Chargeoffs t Provision 2011 6/30/2014 Services Corporation
Slide 12: Allowance
Allowance ALLL ($000's) LLL 2011 6/30/2014
Slide 13: Allowance
Allowance ALLL/ Non-Perf. Loans | | | - 2011 6/30/2014
Slide 14: Balance Sheet Highlights
Balance Sheet Highlights Dollarsin Thousands (000) Total Assets Investments Net Loans Deposits & Repurchases Shareholders’ Equity 2012 $990,248 $1,027,363 $125,301 $133,328 $756,687 $743,200 $841,089 $916,649 $87,182 $91,634 013 $984,587 $159,674 $713,711 $869,558 $95,388 6/30/2014 $1,022,551 $175,4
Slide 15: 2014 Balance Sheet Growth
2014 Balance Sheet Growth 6/30/2014 12/31/2013 = +/-% Total Assets (000) $1,022,551 $984,587 +3.9% Investment Securities (000) $175,419 $159,674 +9.9% Net Loans (000) $723,200 $713,711 +1.3% Deposits and Repos (000) $902,968 $869,558 +3.8%
Slide 16: Financial Highlights
Financial Highlights Dollars in Thousands (000) 2011 2012 2013 6/30/2014 Net Interest Income $32,637 $32,252 $31,664 $15,688 Provision $7,524 $5,225 $2,920 $464 Noninterest Income $10,200 $9,451 $9,877 $5,243 Noninterest Expense $28,333 $30,601 $31,094 $15,304 Income before Taxes $6,980 $5,877 $7,52
Slide 17: Performance Measures
Performance Measures 2011 2012 2013 Return on Avg. Assets 0.66% 0.51% 0.61% Return on Avg. Equity 7.68% 6.00% 6.72% Efficiency Ratio’ 63.46% 70.44% 72.01% 70.63% Net Interest Margin 3.73% 3.50% 3.47% 3.56% ‘Non-GAAP measurement — Efficiency Ratio Noninterest expense/tax equivalent net interest incom
Slide 18: Shareholder Value
Shareholder Value 2011 2012 2013 6/30/2014 Diluted earnings per $1.66 $1.32 $1.51 $0.99 share Market value per $12.35 $14.00 $17.10 $19.90 share Current dividend 8.74% 4.86% 3.98% 3.42% yield
Slide 19: Safety and Soundness
Safety and Soundness 2011 2012 2013 6/30/2014 Risk-based capital 12.14% 12.60% 14.24% 14.53% ratio (Total) Leverage ratio (Tier 1) 8.40% 8.29% 9.14% 9.26% Tangible common 7.82% 8.01% 8.79% 8.93% equity ratio” Nonperforming 2.60% 4.10% 3.04% 2.46% assets/total assets Allowance for Loan 1.27% 1.38% 1.
Slide 20: Balance Sheet Growth
Balance Sheet Growth Dollars in Thous¢ (000) 6/30/2014 Total Assets $1,022,551 Investment Securities $175,419 Net Loans $723,200 Deposits and Repos $902,968 Shareholders’ Equity $99,959 6/30/2013 +, $1,032,641 $152,139 $717,729 $920,731 $92,761
Slide 21: Net Income Growth
Dollars Net Income Growth usands (000) 6/30/2014 6/30/2013 Net Interest Income $15,688 $15,440 Provision $464 $1,605 Noninterest Income $5,243 $4,785 Noninterest Expense $15,304 $15,208 Income Tax $1,018 $506 Net Income $4,145 $2,906 +/-% 41.6% -71.1% 49.6% 40.6% +101.2% 442.6% Services poration
Slide 22: Non-Interest Income
Non-Interest Income 2011 2012 2013 6/30/2014 a % of Average Assets F&M Trust 1.11% 0.74% 0.96% 0.95% Peer Group’ 0.75% 0.73% 0.74% 0.65% * Peer Group data is derived from the Uniform Bank Performance Report for banks headquartered in Pennsylvania with average assets between $750 million and $2 billi
Slide 23: Strategic Initiatives
Strategic Initiatives Non-Interest Income * Cash Management Services * Debit Card Overdraft Opt-in + Merchant Card Services * StartFresh™ Checking * EquityAdvantage Card MQ Franklin Financial
Slide 24: Investment & Trust Services
Investment & Trust Services * Trust powers since our incorporation in 1906 + Fully integrated trust, investment, insurance and brokerage services, focused exclusively on client needs + 5-year average annual growth rate of revenue = 6% per annum * Operating profitability ratio of 31.6% + Employee ben
Slide 25: Investment & Trust Services
Investment & Trust Services * Over 300 years of combined financial services experience among our professional staff members + Professional designations include: CFPs (Certified Financial Planner), CFA (Chartered Financial Analyst), JD (Juris Doctor), CTFA (Certified Trust and Financial Advisor), AAM
Slide 26: Other Strategic Initiatives
Other Strategic Initiatives * Comprehensive Delivery Channel study ¢ Analyze potential of all branches below $40 million in deposits * DRIP success — raising capital * Succession planning — Board, Management, CEO MQ Franklin Financial
Slide 27: Improving Employment
Improving Employment |__| dune 2013 | Dec 2013 | Mar 2014 | June 2014 Cumberland Co 6.3% 5.3% 5.0% 44% Franklin Co 6.3% 5.7% 5.3% 4.6% Fulton Co 8.7% 8.0% 7.5% 6.2% Pennsylvania 7.5% 6.8% 6.0% 5.6% US 7.5% 6.7% 6.7% 6.1% Unemployment Rate, seasonally adjusted. Source: PA Department of Labor and indu
Slide 28: June County Unemployment Rates
July 29, 2014 ally Adjus' Center for Workforce Information & Analysis, ited n 9) _ (9) [ag ~~ ¢c co) £ =~ 2 joe £ (9) ¢ =) June County Unemployment Rates, Season:
Slide 29: Fastest-Growing Counties in Pennsylvania
Fastest-Growing Counties in Pennsylvania April 3, 2014 The U.S. Census Bureau reported today on where the heaviest population growth in Pennsylvania was concentrated last year. The fastest-growing county in Pennsylvania between July 1, 2012, and July 1, 2013, was Cumberland whose population rose 0.9
Slide 30: Cumberland County is fastest growing Pa. county
Cumberland County is fastest growing Pa. county By Jim Hook Public Opinion newspaper March 27, 2014 Most of Pennsylvania's fastest growing counties are in the southcentral and southeast part of the state. Cumberland County led all 67 counties in percentage growth between April 2010 and July 2013, ac
Slide 31: Thank You!
Slide 32: Franklin Financial
68:4 Franklin Financial Franklin Financial Services Corporation Stock Symbol: FRAF (OTCQB) www.franklinfin.com www.fmtrustonline.com
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